Kaye Fallick

Kaye is a retirement commentator and coach, with 25 years’ experience writing about retirement income. She has authored two books on life stage changes – Get a New Life and What Next? – and enjoys regular radio and podcast appearances. Her favourite mission is to offer plain English explanations of complex rules so that all retirees can benefit. She is based in Melbourne but enjoys escaping to Italy whenever possible.
Income and assets limits changes 20 March 2025

Income and assets limits changes 20 March 2025

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Last week we confirmed the 20 March Age Pension rate increase of $4.60 (singles) and $7.00 (couples combined) for 20 March. This week we are pleased to confirm that all Retirement Essentials calculators have been updated with the new rates, ready for you to access.

Many people might dismiss the $4.60 per fortnight for singles as barely covering a cup of coffee. It’s even less in the case of couples. Yes, it’s true this is a small increase. Even lower, however is the increase in the Commonwealth Rent Assistance (CRA) maximum payment which amounted to less than a dollar, despite rental increases in 2024 of nearly 7%.

It is possible that this is the full extent of relief Age Pensioners will be given until the next round of indexation in September. But given the proximity of an early Federal Budget (March 25 brought forward due to the election by mid-May), it’s also a strong possibility that extra cost of living relief specific to older Australians will be included in this early Budget.

In the meantime, how to view these changes? As they say in the classics, it’s often not what you’ve got, rather what you do with it. And whilst that may sound flippant, far from it. Because buried in the detail of the base rate changes are further changes, which can help you review what you’ve got and see how to maximise all entitlements.

We’re referring of course to the income and assets test qualifying limits. They are both now more generous, with a $9.20 – $18.40 increase in income limits and asset limit increases of $1500-$2000. There’s a detailed explainer on how these limits work here, but the following is a quick refresher on why these tests matter so much.

Asset-rich, cash-poor? Pros and cons of equity access

Asset-rich, cash-poor? Pros and cons of equity access

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A change is playing out in retiree households across the nation. One that is barely discernible but will have major repercussions for a generation of retirees to come.

And that’s the change in home ownership status for Australians as they exit the workforce. Once it was a safe bet that a retiree would fully own their own home. Now, as 55-59-year-olds approach the first major retirement goalpost (age 60, or Preservation Age), there’s a 50% chance that they are still paying off a mortgage.

Still having a home loan is something that may or may not be manageable as you move into retirement. So what are your options?:

You might choose to sell, but that may mean leaving a familiar, preferred neighbourhood. 

You might downsize, but costs of selling and repurchasing can sometimes negate any profits on the sale. 

Or if your super is substantial enough, you might use that to pay down your loan, but that may mean no savings to top-up Age Pension payments when you are no longer working. Which brings us back to the topic of asset-rich, cash poor.

The steady increase in retirees with mortgages has seen a rise in both government and private equity access schemes. Statistics provided by the Department of Social Services to Retirement Essentials late last year show the government scheme (described below) has gone ahead by leaps and bounds since it was introduced, with participants (over the previous 12 months) increasing from 9750 in June 2023 to 13,479 in June 2024.

Today we consider the two most popular ways of accessing home equity, their features and benefits  and how they compare. These two forms of home loan are:

The Australian Government Home Equity Access Scheme (HEAS)

Reverse Mortgages (provided by private institutions).

Typically retirees accessing the equity in their homes do so for the following reasons:

To top up existing retirement income to have a more comfortable lifestyle

To reduce debt

To lend to family, often adult children as a ‘Bank of Mum and Dad’ lender

To travel

To renovate or maintain the family home

How do income needs change as you age?

How do income needs change as you age?

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We were delighted to receive some great comments to last week’s newsletter, as well as some really good questions. Two that stood out were in response to Amanda Hardy Lai’s article, How much is enough for a comfortable retirement?

Having read Amanda’s article Linda asked a very logical follow-on question:

‘How do you calculate how much you need in retirement funds once you are 70, 75, 80 or older?

(It’s) anxiety provoking not knowing whether you have sufficient funds left in pension funds to survive to an advanced old age after you retire. Please can you do an article on that giving some actual figures for Australians in their seventies, eighties and nineties compared to what you would need at 65?’

And Maree endorsed Linda’s question with one of her own, commenting:

‘Really good question Linda.
It would be great to get actual insight on how much 70, 75, 80 and older people spend per year, what their situation is e.g. their health, where they live, home or care home, whether they had any unexpected expenses that they didn’t plan for e.g. major home repairs, health issues, replacing major appliances and how/if they managed to do all this and continue living a comfortable retirement.
Did they have enough to do any overseas travel, how often, did they go on holidays within Australia, how often?’